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Home loans made clear

Real Estate prices going down down down

By johnboy 1 November 2013 31

The dinner party bores have fallen silent as the ABC reports on Canberra’s ever softening real estate market:

the situation in Canberra is different where real estate prices slipped 1.5 per-cent in October.

The Housing Industry Association (HIA) says uncertainty over public service jobs is driving the fall.

HIA senior economist Shane Garrett says the easing of prices in the national capital is not surprising after the election.

“It is a fall back in price values in Canberra over the last quarter.

Having recently been looking for a rental property I was surprised to see naked panic amongst landlords. That’s got to flow on eventually.

Shall we call this a win for Andrew Barr’s affordable housing policies?

What’s Your opinion?


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Real Estate prices going down down down
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MissChief 6:29 pm 06 Nov 13

davo101 said :

Watson said :

House prices are only of importance to first home buyers and investors.

and people looking to downsize to fund their retirements
and people looking to borrow for business purposes
and banks
and bank shareholders
and anyone who has money in a super fund that owns bank shares

and the global economy… but other than that (what have the Romans ever done for us)…

davo101 2:45 pm 06 Nov 13

Watson said :

House prices are only of importance to first home buyers and investors.

and people looking to downsize to fund their retirements
and people looking to borrow for business purposes
and banks
and bank shareholders
and anyone who has money in a super fund that owns bank shares

Yman 2:37 pm 06 Nov 13

Watson said :

milkman said :

shauno said :

My house price can go down to zero as far as im concerned because I dont have any intention to sell.

That’s pretty much how I feel about my own home too.

I think I would like to upgrade in the next few years (I really only want a slightly bigger yard), but if the value of my house goes down (slightly), then so will the value of the house that I want to buy. House prices are only of importance to first home buyers and investors.

From time to time, I’ve seen phrases in property ads like: “due to changes of circumstances”, “going overseas” and so on…

What the owners want is one thing. What the owners have to face is another.

Watson 1:56 pm 06 Nov 13

milkman said :

shauno said :

My house price can go down to zero as far as im concerned because I dont have any intention to sell.

That’s pretty much how I feel about my own home too.

I think I would like to upgrade in the next few years (I really only want a slightly bigger yard), but if the value of my house goes down (slightly), then so will the value of the house that I want to buy. House prices are only of importance to first home buyers and investors.

Yman 1:18 pm 06 Nov 13

OpenYourMind said :

I always get the impression when reading RiotACT posts on this topic that there’s a group of people that imagine impossibly cheap ‘affordable’ housing. They seem to lament the $50,000 house of yesteryear, but don’t seem to yearn for $10k per annum salaries to go with the old house prices.

Take a look at the salary history of a typical PS in Canberra at APS 5. He/she earned around 50K in 2003 and just above 70K per annum now. And imagine how the affordability dropped when house price tripled in those years.

So don’t blame the rise of salary/labour cost.

c_c™ 12:46 pm 04 Nov 13

Those law students been the vast, vast majority these days.

Statistically, the median, personal net benefit for income of a law graduate is over $1.1m, compared to 200-400k for an liberal arts graduate. But that’s over a life time, and for the early portion of a career you won’t see that kind of money. You’ll be paid in line with public servants working shorter hours who have less expenses, and that’s if you get a job. Last clerkship round in Victoria saw less than 1/4 successful. The anecdotal figures from around Canberra are just as bad. Unless you know someone, or can quickly get to know someone who knows someone, you’re not going anywhere, even with prior degrees and glowing transcripts.

HiddenDragon 12:41 pm 04 Nov 13

#15 milkman said:

“……Incomes in the macro may have doubled, but what trades charge for labour on jobs is MUCH higher than that (at least triple). My figure comes from experience in building and renovating over the past 15 years…..”

This interesting information should be conveyed to the law students who are fretting at the prospect they may never get to practise.

MightyJoe 12:04 pm 04 Nov 13

but that would include knocking down the remaining structures and removal of rubble..

watto23 said :

If you look at what insurance wants to cover to rebuild then i can tell you my 3 bedroom place is around $300k for a rebuild, assuming say a fire burnt it out.

I’d not be surprised though if for some bizarre reason it costs builders more on more expensive land 🙂

watto23 11:35 am 04 Nov 13

If you look at what insurance wants to cover to rebuild then i can tell you my 3 bedroom place is around $300k for a rebuild, assuming say a fire burnt it out.

I’d not be surprised though if for some bizarre reason it costs builders more on more expensive land 🙂

MightyJoe 11:24 am 04 Nov 13

Having recently built a house, i’m a bit more than qualified to concur with this estimate.

My house cost (me) $314k not including land. At least $60-80k was the builders profit. My neighbour (who we know the builder) sold the house for $355k and advised that his profit was $60k.

My place included a lot of ‘expensive’ extras, but when economies of scales comes in (my builder was building 10 houses at the time) the extra’s didn’t actually come to that much and hence the lower price. Neighbours house is a little bigger, but worse fittings.

JC said :

milkman said :

It’s always nice to bring up conspiracy theories and throw around terms like ponzi, but the simple reality is that there is probably $250k of labour alone in a new 4 bedroom house. You’ve also got land development costs, building materials and everyone in the development chain getting their slice of profit.

Interesting you use the word probably, meaning of course you don’t really know. Now I don’t know the cost of labour either, but I do know what it cost me to build my house 13 years ago. That cost was $100,000 for a standard 3 bedroom house, excluding land, stamp duty etc.

Now 13 years was a long time ago, but wages have more than doubled in that time and the cost of materials doubled too. So my house would probably (again like you I don’t really know) cost $200,000-$250,000 to build again excluding land costs.

Back then to go to a 4 bedroom and separate dining I was looking at $20,000 (which I should have done in hindsight) extra so in today’s terms using the method above that would be $40,000.

So using some real figures and some thought I would say the cost to build a standard 4 bedroom house, materials and wages would be in the order of $250,000 to $300,000 excluding land.

Now looking around at land prices and the cost of brand new houses, I reckon I am pretty much on the money with these figures.

So where did your figure of $250k for labour alone come from?

davo101 9:27 am 04 Nov 13

HiddenDragon said :

Before we know it, the VFT will make us a commuter suburb of Sydney,

we’ll fly to work in our hover cars, take holidays on the moon, and atomic power will make electricity too cheap to bother metering.

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